ETFs and Responsible Investing: one winning combination

As investors’ awareness on responsible investments keeps on rising, they become more demanding in terms of asset manager experience and solutions to implement effectively these criteria across their entire portfolio. Amundi ETF meets this demand through a range of equity and fixed income ETFs replicating SRI and Low Carbon indices.

The popularity of socially responsible investment shows no sign of slowing.

ESG criterias are becoming more material to companies and investors. Considering ESG criteria could potentially impact a company’s financial performance.

ESG data quality, depth and scope of coverage has significantly improved and more information on companies’ extra-financial impacts is now available to investors.

Combining Responsible Investing with index management

Contrary to conventional wisdom, index management is compatible with responsible investment. At Amundi, the ETF and Indexing solutions are fully part of the Group’s Responsible Investing commitment and policy .

Engagement and Voting Policy

Amundi has a dedicated team which votes on behalf of its passive and actively managed products. The firm’s size and scale make it an effective influencer.

Systematic exclusion policy

Producers of controversial weapons are systematically excluded from open ended index funds and ETFs.

They also incorporate an additional ‘controversial activities’ and a minimum ESG score filter.

This produces a socially responsible investment in corporate bonds, which despite excluding stocks, has a very low level of tracking error compared to reference benchmarks. This makes it possible to use these ETFs as a core allocation.

Amundi ETF Low Carbon offering

Amundi ETF provides an exposure to the MSCI World Low Carbon Leaders index, designed to exclude the largest CO2 emitters and stocks based on carbon emissions and reserves while minimizing tracking error and reducing carbon exposure by at least 50%.

The Strategy Index will retain a sectoral and geographical composition similar to its parent index.

Amundi is one of the co-founders of the Portfolio Decarbonization Coalition(PDC) and a pioneer in low carbon index solutions.